Freshippo hosts Starbucks stores
Alibaba (BABA) this month unveiled an internal restructuring that includes separating its Freshippo supermarket chain into a standalone business. Freshippo operates dozens of supermarket locations across China. It also hosts Starbucks (SBUX) kiosks where customers can both order coffee and pick up coffee ordered through the Freshippo app and pick up the order at kiosks. The third Starbucks store insider Freshippo location opened recently, according to a report from Alibaba news service Alizila. Starbucks also has an arrangement to prepare coffee for deliveries to customers from Freshippo locations. Freshippo falls under Alibaba’s core commerce business, which generated $8.7 billion in revenue in the March quarter.
Spin-off of Chinese businesses precede public listings
If history is any guide, the separation of Freshippo into a standalone business could signal its preparation for a public listing. Baidu (BIDU), China’s top Internet search company, first separated its digital video unit iQiyi (IQ) before it took it public in March last year. The IPO of Tencent Music Entertainment (TME) in December last year was preceded by the business being separated from its parent Tencent (TCEHY). In America, eBay (EBAY) separated its payments unit PayPal (PYPL) before the business went public in 2015.
Public listing of Freshippo may not happen immediately
It can take a long time before a separated unit goes public. Alibaba separated its payments unit Ant Financial into a standalone business in 2011, but the business has yet to go public although its initial public offering is highly anticipated. JD.com (JD) is also expected to take its logistics unit JD Logistics public.